The EMEA server market is still in decline, but at a slower rate, according to the latest EMEA Server Tracker from International Data Corporation (IDC).
In Q4 2012, the decline was 7.4% to $3.8 billion (€2.9 billion) when compared to the same quarter in 2011. The decline was less than the previous quarter, when it stood at 10.4%.
According to IDC, the reason for the arrested decline was due to x86 server sales and mainframe refreshes.
The x86 server segment remained the main growth engine, the report found, with revenue of $2.6 billion (€2 billion), down 4.9% annually and equivalent to 68.7% of the total market (a decline in market share from the previous quarter, when x86 systems reached 76.4% of the total server value market in EMEA). Industry standard servers also suffered a decline in volumes, with shipments down 10.8% annually.
Non-x86 sales fared a bit better in 4Q12, said IDC, with revenue slightly above the $1 billion (€768 million) mark despite annual declines of 12.5%, which was nevertheless a softer decrease than in 3Q12 when the technology was down 20.3% year on year. Although the signs of moderate recovery in the non-x86 market must be put in the context of seasonality factors-the last quarter of the year has historically been the strongest for legacy sales-there is no doubt that this shows a more balanced outlook partly due to CPU refresh cycles hitting some of the major platforms, specifically mainframes.
"After three quarters of dollar revenue declines of around 11%, the market showed a little stabilisation, thanks mostly to a more favourable comparison to 4Q11 and a cyclical rise in mainframe sales," said Giorgio Nebuloni, research manager, Enterprise Server Group, IDC EMEA. "The picture for the full 2012 was nevertheless negative, with a 10% yearly decline in dollars and -3% in euros. Volumes remained under considerable pressure in 2012, down 7% yearly, as consolidation and macroeconomic factors took their toll. If one compares that to the slower, but still slightly positive growth in compute capacity during the past year, it appears clear that data centres are really learning how to do more with less."
The report said that the Western European market continued to reflect the general trend toward x86 servers, although this trend slowed, with industry standard servers generating $1.8 billion (€1.38 billion), or 67.3% of total factory revenue in Q4 2012 (compared with 76.2% in Q3 2012). Non-x86 sales increased their share of the Western European market this quarter, generating $919.91 million (€707.3 million), or 32.7% of total sales, a near 10 percentage point increase on the 23.8% seen in Q3 2012.
"Legacy architectures displayed greater dynamism in 4Q12 than we have been used to of late, partly due to seasonality factors but also because of mainframe refreshes by IBM, which launched the zEC12 architecture in early 2H12. Despite this, the rate of decline in non-x86 revenue in the Western European region continued to be quite strong, with sales declining by 11.4% against a decline of 6.4% for industry standard servers," said Beatriz Valle, senior research analyst, Enterprise Server Group, IDC EMEA. "In Western Europe, demand in all big three countries was subdued with double-digit spending declines and high-single-digit drops in spending also for the x86 part. Public sector spending remains under pressure and financial services organisations are shrinking their IT budgets and driving less demand for server hardware."
In terms of vendors, IBM held top spot in Q4 2012 with a 35.7% market share, followed by HP at 33.0% and Dell at 12.8%.
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